Skip to content 
Investing in a Bali rental property
There a number of reasons why people want to invest in Bali property. The real estate market in Bali has been an investors dream over the past 20 years.
Rising tourist numbers have created high demand for holiday rental villas. Those who were early in the cycle continue to generate significant rates of income through property rentals.
This article delivers an overview of the holiday rental market in Bali. We have focussed on three tourist hotspots as we analyse the state of Bali’s real estate market in 2024.
The research seeks to provide you with the knowledge to make an informed decision as you prepare to invest in a Bali property.
Key property markets in Bali
Whether you are looking to invest in a Bali property as a second home, holiday home or purely as part of your investment investment strategy, you will want to select a location that fits with your specific needs.
With this in mind, we have decided to analyse three tourist hotspots in Bali to provide a balanced view of what the island has to offer for holiday makers;
- Canggu
- Seminyak
- Amed
Researching Bali's property market
Publicly available data for Bali’s real estate market is limited making it difficult for investors to make the best decisions for their needs.
As a leading property developer, we make it our job to provide investors with accurate information on the state of Bali’s real estate market.
Our research efforts help us to understand the market and enables us to predict where the market is moving with a certain degree of accuracy.
We use reliable data sources that are paid for services and use our expertise to unravel the information into an easy to read format.
Bali Property Investment Report 2024
This comprehensive Investment Report is a must read for property investors focused on the Bali real estate market.
The 54 page PDF provides a detailed insight into:
Are Bali rental villas a good investment?
Investing in a Bali property has been a highly profitable investment for many. Land and property values in some areas Bali have exploded over the past 20 years. Tourist numbers have increased from 2 million in 2008 to an anticipated level of 7 million tourist visits during 2024.
The influx in tourism has created a resilient market for holiday rental villas. Property owners have cashed in on the trend to stay in a private villa instead of paying much higher prices for hotel resorts.
In many cases, property owners have paid back their principle investment in 3-5 years from the rental profits alone. Those lucky enough to buy in during the early part of the property boom are now sitting on prime real estate located in a high tourist demand location.
Rising land and property prices
As tourist demand for holiday rental villas goes from strength to strength, the price of land and property has soared.
In the more developed tourist areas of Sanur, Canggu, Seminyak and Ubud, land and property values have increased upwards of 500% over the past two decades.
In 2008, A 3-bedroom pool villa in Sanur would cost somewhere in the region of US$180,000. Fast forward to 2024 and that same property is likely worth one million US dollars.
This is not an isolated example. It is s a simple matter of how property markets around the world react to the increasing demand driven by tourism.
Is Bali's real estate market close to a cycle peak?
There is no getting away from the fact that Bali’s tourist industry will continue going from strength-to-strength over the coming years.
In the same way, the demand for holiday villa rentals will be high as tourists find more value in a rental villa than they find in a hotel resort.
However, there is an argument to be had on whether Bali’s property market, especially in the developed South, has become a victim of its own success.
As a potential investor, you should be aware that real estate markets (and any other asset market) simply do not go up forever.
There is always a period during the course of each cycle where property market values begin to slow, stagnate before declining.
Where is Bali real estate in the 18-year property cycle?
Discover why some areas in Bali are approaching their property market peak.
Learn which real estate market is in the early stages of a 14+ year explosive phase.
The 54 page report clearly identifies why;
Bali's rental market in 2024
The following data sets will provide an analysis on how the rental market in key tourist destinations in Bali are performing.
When you are looking at the charts and reading the commentary, it is important to consider the following variables;
- The cost of buying a villa in some areas is much higher than others
- The supply of villas in developed tourist locations is high
- Large supply of villas eventually leads to pricing and valuation pressures
- Will property values continue to increase in the most saturated markets?
- Do investors capture more long-term value buying into the early stages of a property market boom?
Bali will remain Indonesia’s top tourist destination for many years to come. The Ministry of Tourism wants to see more tourists exploring more of the country.
Tourism Minister’s speech for the Asia-Pacific Tourism Conference in Bali on 11th January 2014
Rental market in Amed
Amed is a relatively undiscovered ocean front location in the Northeast of Bali.
The charming fishing town is best know for its world-class diving waters, its laid-back lifestyle, and is perhaps as close to the real Balinese experience you can find on the island.
Tourists and investors are recognising Amed as Bali’s next growth town. There is a very strong argument to suggest that Amed’s real estate market is entering the third year of a 14+ year property boom cycle.
The supply of quality 3-bed/3-bath villas in Amed is limited. There is only one development in Amed that offers the opportunity for investors to buy a prime piece of real estate so early in the cycle.
Owners of quality 3-bed/3-bath villas in Amed are enjoying very high occupancy rates.
With strong demand and limited supply, property owners are able to profit from rising rental rates as they watch the value of their property increase overtime.
Rental data in Amed:
3-bed/3-bath villas
The data below has been complied through the AirDNA platform. AirDNA is an industry leading real estate data analytics platform that measures holiday rental property performance around the world.
3 Bed
3 Bath
6 Guests
$48.5k
Projected Revenue
92%
Occupancy
$144
Average Daily Rate
Annual realised revenue in Amed
3-bed/3-bath villas 2022-2023
The chart below shows a strong upwards trend in the realised revenue of 3-bed/3-bath holiday rental villas in Amed. As tourist demand increases, the realised revenue will continue to rise at an exponential rate.
Rental market in Canggu
Canggu’s real estate market has been on a tear over the past decade. Rental rates have grown and the cost to buy a villa has exploded. So much so, that investing in a Bali property in Canggu has become far too expensive for many.
Property developers have fuelled the frenzy by acquiring plots of land intended to squeeze small villas into tight spaces in order to maximise their profits from every last square meter.
Those buying early in cycle have undoubtably done very well. However for new investors, buying a rental property at this late stage in the cycle is likely to limit their ROI potential.
Combing the high day-to-day living costs and traffic congestion, many investors are looking to other areas in Bali in search of more value and a better holiday experience.
Rental data in Canggu:
3-bed/3-bath villas
The data below has been complied through the AirDNA platform. AirDNA is an industry leading real estate data analytics platform that measures holiday rental property performance around the world.
3 Bed
3 Bath
6 Guests
$51k
Projected Revenue
66%
Occupancy
$211
Average Daily Rate
Annual realised revenue in Canggu
3-bed/3-bath villas 2022-2023
The chart below indicates that realised revenue for 3-bed/3-bath villas in Canggu has reached its peak. The chart shows that rental revenues in Canggu are in decline.
This plays in our thesis that most of the developed resorts in Bali are reaching their market cycle peak. Both rental prices and property valuations are close to entering a period of stagnation, followed by a period of decline.
You can read more about the 18 year property cycle in our in-depth investors report, and how the property cycle is running true to course in Bali.
Rental market in Seminyak
Seminyak shares very similar real estate market characteristics to those of Canggu. Early investors have made a lot of money and they will continue to profit from high occupancy and strong rental rates.
However, the cost of a holiday in Semiyak is becoming expensive. The cost to rent a villa, buy a beer on the beach, grab a coffee in a cafe or a bag of apples from the store is high.
As real estate and rental values have risen, businesses serving the tourist industry have been forced to raise their prices to cover their increasing rental rates. It is the end consumer (tourists) that eventually pays for this inflation cost.
Tourists are beginning to factor the cost-benefit of increasing prices and heavy traffic congestion into to their holiday destination decisions. Many are choosing alternative destinations in Bali as they search for a less stressful holiday that represents a more traditional Balinese experience.
Rental data in Seminyak: 3-bed/3-bath villas
The data below has been complied through the AirDNA platform. AirDNA is an industry leading real estate data analytics platform that measures holiday rental property performance around the world.
3 Bed
3 Bath
6 Guests
$64.2k
Projected Revenue
74%
Occupancy
$238
Average Daily Rate
Annual realised revenue in Seminyak
3-bed/3-bath villas 2022-2023
The chart below shows a very similar pattern to the realised revenue chart for Canggu. An oversupply of 3-bed/3-bath villas is exceeding the tourist demand as tourists become frustrated with the high price of a holiday in Seminyak.
As the demand for 3-bed/3-bath villa rentals decreases, property owners are forced to lower their rental rates. As more property owners begin to lower their prices, there becomes a knock-on effect as owners look to capture occupancy through a price-war strategy.
The decline under this scenario becomes rapid and bottomline ROIs plummet. New investors buying a rental property at this stage of the cycle are highly likely to be exposed to much lower returns and a much longer investment payback ratio.
Compare Amed, Canggu, Seminyak
The chart below shows that annual projected revenue from 3-bed/3-bath rental villas in Seminyak and Canggu is in decline.
Rental revenue in Amed continues to increase as the market continues to strengthen during the early stages of the property market cycle.
The long-term prospects to invest in Bali property indicate that Amed is better positioned from an investors perspective that Canggu and Semiyak.
Summary: Invest in Bali Property
Investing in a Bali property as a rental investment, a second home, or as a combination of both still presents a great opportunity. The Tourism Ministry remains highly focussed on Bali’s tourist industry. Investment into critical transport networks and tourism infrastructure is a priority as the Indonesian government seek to maintain Bali as one of the world’s best place to visit.
However, many tourist areas have been overdeveloped as traffic congestion and high holiday prices begin to frustrate frequent visitors to the island paradise. Many have seen Bali change over the years, and in most cases the changes have not been for the better.
Frequent visitors are beginning to explore other areas of Bali in search of the holiday experience they once knew. There is a feeling on the island that the South of Bali has lost the battle with commercialism and that the true Balinese experience is all but a distant memory.
Emerging tourist destinations like Amed are benefiting from a tourist flow searching for a more traditional holiday experience. Laid-back lifestyles and lower cost holiday rental villas and living expenses has positioned Amed as the next big growth town in Bali.
As Canggu and Seminyak reach their points of saturation and decline, Amed is entering the early stages of a tourist and property market boom. Those who are early to invest in a Bali property during the early part of the property market cycle are positioned to make life changing returns.
High rate occupancy for 3-bed/3-bath luxury villas produce an impressive passive income in the short-term, whilst long-term wealth is built as land and property prices explode.
